More than 5 million people in Britain have no idea how much their mortgage is costing them, research from habito, the digital mortgage broker, suggests.
More than 5 million people in Britain have no idea how much their mortgage is costing them, research from habito, the digital mortgage broker, suggests.
With 7.6 million active mortgages in Britain, the study found one third (33%) of UK mortgage holders don’t know what interest rate they are.
The research also revealed that of the mortgage owners surveyed: one in eight (over 1.8 million mortgage holders) doesn’t know if they have an interest-only mortgage; almost one in 10 (over 1.4 million mortgage holders) doesn’t know if their mortgage is a fixed or variable rate; almost one in 10 (over 1.3 million mortgage holders) doesn’t know how long their mortgage term is; and one in every 20 mortgage holders (over 700,000 mortgage holders) cannot even name their lender.
Mortgage holders in Wales are the savviest in UK when it comes to knowing what interest rate they are paying on their mortgage, with far more people in the region (79%) knowing this than in other areas of UK.
That compares to just 65% of mortgage holders in London and 63% in the South East, where house prices are often higher.
The research also revealed a stark gender gap. Less than two thirds of women know how much interest they pay on their mortgage, which rises to almost three quarters (73%) among men.
Daniel Hegarty, chief executive and founder of habito, said: “For most people, a mortgage is the biggest financial commitment of their lives, yet the application process is opaque, slow and untouched by technology.
“It’s no wonder there is such a widespread lack of awareness among existing mortgage holders and such reluctance to manage their mortgages over the long-term.
“Applying for a mortgage with a traditional broker is stressful and confusing – people just want it to be over as quickly as possible and then forget about it.
“It is time mortgages were brought into the 21st century. Technology has transformed and simplified other aspects of our lives beyond recognition, yet the mortgage application process is no different from 30 years ago.
“The industry has resisted change for decades and has been reluctant to put the customer at the heart of the process.
“Habito is here to change that. We’ve created a way to make the mortgage application process simple and transparent.
“We analyse every mortgage from over 100 lenders in seconds and find the best one for each customer. It is a simple, honest and transparent way to find and apply for the right mortgage.”
